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Boeing rents 'homeless' 747s to AirBridgeCargo to maintain production run
BOEING recently rented two "homeless" 747-8F cargo jets to a Russia's AirBridgeCargo (ABC) Airlines, showing how it keeps its jumbo jet production run going, reports the Wall Street Journal.
The plane maker added an order for two of the jets, but was in fact leasing the planes from its finance arm to ABC, a unit of Volga-Dnepr Group, which said it may acquire up to 20 more, a move that would almost double the orders of the slow-selling jumbo.
The new deliveries were "white tails" previously parked at Boeing's plant near Seattle following the cancellation of a previous order. Boeing said four other completed 747-8s are still parked following order cancellations.
Volga-Dnepr's 20-plane commitment looked to provide a crucial boost for a programme that has just 22 outstanding orders for the freighter and passenger versions, forcing Boeing to cut production to just one a month from next March as it seeks new customers.
But the company faces the challenge of placing the unsold planes and potentially renting or financing additional deals, said aircraft financiers.
Typically, Boeing only rents planes directly to airlines unable to secure commercial funding to buy them, and the 747 now accounts for more than half of the operating lease liabilities on Boeing's balance sheet.
AirBridge Cargo president Denis Ilin confirmed the two 747-8Fs were being leased from Boeing Capital Corp, the company's finance arm. AirBridge now rents three 747-8Fs from Boeing, which is also leasing three more to Silk Way West Airlines.
Azerbaijan's Silk Way hit a snag last year trying to secure a guarantee from the now recently revived US Export-Import Bank to support buying two of the jets, forcing Boeing to retain ownership and rent them.
Boeing said it remained in talks with Volga-Dnepr about selling or leasing 18 more of the jets, which Mr. Ilin said could be delivered up to 2022. Industry executives said AirBridge Cargo had the capacity to take up to three of the jets a year.
The plane maker added an order for two of the jets, but was in fact leasing the planes from its finance arm to ABC, a unit of Volga-Dnepr Group, which said it may acquire up to 20 more, a move that would almost double the orders of the slow-selling jumbo.
The new deliveries were "white tails" previously parked at Boeing's plant near Seattle following the cancellation of a previous order. Boeing said four other completed 747-8s are still parked following order cancellations.
Volga-Dnepr's 20-plane commitment looked to provide a crucial boost for a programme that has just 22 outstanding orders for the freighter and passenger versions, forcing Boeing to cut production to just one a month from next March as it seeks new customers.
But the company faces the challenge of placing the unsold planes and potentially renting or financing additional deals, said aircraft financiers.
Typically, Boeing only rents planes directly to airlines unable to secure commercial funding to buy them, and the 747 now accounts for more than half of the operating lease liabilities on Boeing's balance sheet.
AirBridge Cargo president Denis Ilin confirmed the two 747-8Fs were being leased from Boeing Capital Corp, the company's finance arm. AirBridge now rents three 747-8Fs from Boeing, which is also leasing three more to Silk Way West Airlines.
Azerbaijan's Silk Way hit a snag last year trying to secure a guarantee from the now recently revived US Export-Import Bank to support buying two of the jets, forcing Boeing to retain ownership and rent them.
Boeing said it remained in talks with Volga-Dnepr about selling or leasing 18 more of the jets, which Mr. Ilin said could be delivered up to 2022. Industry executives said AirBridge Cargo had the capacity to take up to three of the jets a year.
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